Business Partnership Break-ups
Dealing with a partnership dissociation can be a simple, straight-forward process if both partners are amicable, the operating agreement is clear, and the circumstances of the dissociation are mutually beneficial. A partnership dissociation might be a more challenging situation if one or both parties feels they have been dealt with unjustly by the other, necessitating the dissolution.
Partnership Agreements, Operating Agreements, and Contracts
Partners begin a business together with a shared vision. But every partnership has the potential to end and that should be planned for in the beginning. Having a well drafted operating agreement in place when you first form your partnership, can help avoid many difficulties that may arise when partners have a difference of opinion regarding business matters down the line. The operating agreement should spell out in advance how these situations will be handled, and even address the issue of what happens if the partners decide to go their separate ways.
Handling Partnership Disputes
We craft an operating or partnership agreement that suits your business goals, and protects your interests. We'll help you avoid loss of clientele, money, and other assets until the partnership dispute has been settled. If your particular issue is not addressed in your operating agreement, or if you don’t have an operating agreement, you may benefit from having one of our attorneys negotiate or mediate for you. If those options fail, we can litigate your dispute.
Forced Business Break-Up
Over the past couple years, Utah’s LLC laws have changed, and some of those changes have caused concerns for business break-ups. There may be a situation where business partners are deadlocked, and the operating agreement doesn’t give direction on how to proceed in that situation. The new LLC act can expose a business to certain kinds of deadlock. For example, it can effect where the partners disagree on the timing of a distribution of profits, or whether or not to proceed with dissolution. In those cases, it may be necessary for the partners to turn to the courts for judicial intervention.
If your business faces litigation, a court could order the business as sold, or order one party to buy out the other. If your operating agreement is silent on how to evaluate the business, or if you and your partner have difficulty agreeing on a fair value, your business may end up in costly and lengthy litigation. A business lawyer can help you to navigate a dispute in the event of a litigation, and advance your interests in court. Our attorneys have experience avoiding extensive litigation by attempting a negotiated settlement.
If you need legal counsel or representation involving a business partnership break-up, contact Willow Creek Law today. We are here to protect your legal rights and assist with your partnership disagreement. Call (801) 233-0606.